SDN and NFV are Crucial to Getting Cloud Right

Go back to 2008 and you'll find the beginnings of an incredible cost savings opportunity in the emerging world of cloud computing.  Built on the back of grid computing, cloud offered to reduce operational costs by 30% just through the application of mass virtualization technologies (virtual machines, server and data center consolidation, etc.).  Over time the return on investment improved, until in 2012 executives started talking about a 70% overall cost reduction versus previous generation approaches.  By contrast SDN became a topic in enterprises in 2012 and yet within one year executives at some of America's largest companies are touting the opportunity to reduce network expenses by 70%.  It's no coincidence.

In the emerging SDN/NFV discussion the eye-opening "Ah ha" moment repeating itself almost daily is the realization that when moving network functions to software the platform answer is cloud.  As I referred to in my August 2010 post Everything Should be Software, the opportunity is tremendous to continue the commoditization of hardware by moving specialization into software.  Cloud is the platform for SDN and NFV which in turn enhances the value propositions of cloud:

• Improved agility to meet emerging business demands
• Reduced time to market
• Greater efficiency
• On-demand scalability
• Variable cost

As someone who has advocated for years that cloud is the platform of the future onto which companies will build their eCommerce, Big Data, Mobility and Social/Collaboration solutions; an improved value proposition makes cloud all that more enticing.

Imagine being able to bring the transformation, normalization and aggregation tasks from analytics down into the network.  Establishing secure network tunnels on the fly across wired and wireline networks to connect mobile applications to data sources without the risk of interception by a third party.  SDN and NFV bring the functionality required to realize the new data architecture I advocate.

Of course none of the promise of SDN and NFV comes free.  Limiting the speed of adoption is the same culprit that's been holding cloud back for the past 5+ years: expertise.  We simply don't have enough networking experts with backgrounds in software, just as we don't have enough operations, administration, server architecture, storage architecture and security experts with software backgrounds (equally we have few software people with strong network, infrastructure, and security backgrounds).  We are still hampered by the breadth and depth of knowledge required to get cloud right.  Add to this challenge the cost and complexity of moving networks with 99.999% availability and higher into a new technology architecture and the reality sets in the effort will be herculean.  Luckily we have economics on our side.

Compared to the cost of moving data, everything else is free.  As a result there are few who are not jumping at the opportunity to save serious money in their network.  When executives publicly state they see an opportunity to reduce CapEx dramatically and reduce OpEx by as much as 70%, people take notice.  Those expectations are buying signals which drive entrepreneurs to come up with new ideas, venture capitalists to fund those ideas, and buyers to look for start-ups with promising new capabilities.  As in any new market the risk for buyers is separating the wheat from the chaff.  Will Cisco dominate or go dormant?  Can an early leader like Nicera keep its leadership role having been acquired by a mass virtualization focused company like VMWare?  Can the start-ups survive long enough to bring the market the critical mass required to move us past the point of no return?  Will the big companies invest, partner, and acquire to expand their capabilities or to remove competitors from the market?

Although I cannot pick the winners and losers, I am confident all arrows are pointing in the same direction.  We need to keep the faith and foster the willingness to try, fail, and try again.  As with any technology the road to success will be paved by utter failures, however as long as the direction is toward a software driven world I expect our destination will be well worth the journey.